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Click Defense sues Google because of Click Fraud

 

On June 24, 2005, Click Defense, a company which provides software to keep track of Pay-Per-Click advertising, sued Google Inc. in the US District Court in San Jose, claiming that the search engine has failed to protect users of its advertising program from "click fraud," costing them at least $5 million.

Google's AdWords program permits Google's advertising customers to purchase advertising links associated with certain keywords. Google posts the links on the margins of its search engine results pages based on whichever keywords appear in user queries posted to Google's Internet search engine. Google's advertising customers pay Google based on the number of Internet users who click on these advertising links. Click fraud (or Click Spamming) is the term, the industry uses to describe when someone clicks on a search advertisement with an ill intent and with no intention of doing business with the advertiser. Click fraud  is a growing problem in the search engine business (some analysts believe as many as 20% of clicks are fraudulent), and involves competitors clicking repetitively on ads, hiring others to do so, or using automated programs (robots) for this purpose, in order to keep companies from effectively using competitive keywords.

In the complaint, Google, which derives 99% of its revenue from Adwords, is accused of breach of contract, neglicence, unjust enrichment and unfair business practices:

  • Google breached its contract with Plaintiffs by collecting fees for clicks even though Google knew, or should have reasonably known, that the clicks were not actual clicks, but rather purposeful clicks made for an improper purpose

  • Google has breached its duty to monitor its AdWords program for click fraud and to protect plaintiffs from click fraud

  • Google's conduct violates the California Business & Professions Code 17200 ("unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice.")

 

  • June 30, 2005: Neue Klage gegen Google, intern.de:
    "Google wird in einem weiteren Verfahren mit dem Vorwurf konfrontiert, zu wenig gegen Klickbetrug zu unternehmen."

  • June 30, 2005: Click fraud lawsuit targets Google, CNet:
    "A seller of online marketing tools said Wednesday it sued Google, charging that the Web search giant has failed to protect users of its advertising program from click fraud, costing them at least $5 million."

 

 

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